On appeal from the New Jersey Department of Labor and Workforce Development, Docket Nos. PC-967-0805-ROM, PC-959-0805-ROM and PC-1009-0805-ROM.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted February 4, 2008

Before Judges A. A. Rodríguez, C. S. Fisher and C. L. Miniman.

R.I., Inc. d/b/a Seating Solutions, Lisa Suprina, Scott Suprina and Tony English (collectively "appellants") challenge the final agency decision of the Commissioner of the New Jersey Department of Labor and Workforce Development (DOL), ordering that appellants be debarred from public contracts for a period of three years and that they pay $27,937.18 in back wages; $5,028.70 in administrative fees and $25,000 in penalties. This action by the DOL was triggered by R.I.'s violations of the Prevailing Wage Act, N.J.S.A. 34:11-56.25 to -56-57 (PWA). We affirm in part and reverse in part.

The PWA is similar to a minimum wage for employers engaged in "public work." It requires that employers pay certain workers a minimum wage, known as the "prevailing wage." See N.J.S.A. 34:11-56.25 to -56.27. The DOL Commissioner establishes the prevailing wage based on collective bargaining agreements (CBA) of the majority of workers in a given trade in a given locality. N.J.S.A. 34:11-56.30. If an employer is unsure as to the classification of their work, a fact crucial for prevailing wage determination, the employer may contact the DOL for guidance or to receive a new classification.

R.I. is a New York corporation, whose primary business is the installation, assembly and maintenance of audience and spectator seating. R.I.'s principals are appellants: Lisa Suprina, President; Scott Suprina, Vice President; and Tony English, Secretary. R.I. employs approximately seventy workers.

In late 2004, some employees of R.I. decided to form a union. In 2005, R.I. gave voluntary recognition to the United Federation of Maintenance, Installers & Assemblers of Audience & Spectator Seating Systems (Union). R.I. and the Union entered into a CBA. Specifically relevant to the appeal is Appendix A to the CBA, entitled "Economic Waiver & No-Layoff-Guaranteed Fulltime Work Agreement." Given the nature of stadium seating installation, it was very common for R.I. to lay off a high percentage of its workforce during the winter months. The Union determined that it would be in its members' best interests, to waive the members' rights to prevailing wages pursuant to the PWA in exchange for the guarantee of full-time year-round work. Thus, R.I. agreed to refrain from laying off its unionized employees in exchange for the employees' agreement to waive receiving the prevailing wage and be paid the wages set forth in Article X of the CBA. However, by the terms of the CBA, this agreement would go into effect eighteen months after the execution of the CBA. The Union never submitted an application to the DOL for recognition of "stadium seating" as its own craft pursuant to the PWA.

In the early months of 2006, R.I. engaged in three public-work jobs at Saddle Brook High School, West Windsor Community Park and South Mountain Arena. The DOL determined that during these three projects R.I. committed a number of PWA violations. The DOL sent R.I. and its principals written notices of the violations and indicated that it was requiring R.I. to pay back wages, fees and penalties in the amount of $57,965.88. The DOL also indicated that it was considering debarment of R.I. and its principals. R.I. requested a hearing. This was the second time that R.I. had received such a notice. On April 18, 2004, R.I. agreed to pay the DOL $7,568 in back wages, fees and penalties in connection with a similar violation on a different project.

The Administrative Law Judge (ALJ) heard the following testimony. Ashleigh Chamberlain, a senior DOL field representative, testified that if multiple trades claim the work, then the contractor chooses either rate as the prevailing wage. Both the carpenters' union and the ironworkers' union claim installation of bleachers, and only the carpenters' union claims installation of stadium-style seating, the type of work R.I. engaged in at the jobs relevant to this appeal.

George B. Sanford, a Hearing and Review Officer with the DOL, testified that R.I. failed to classify their workers on their certified payroll sheets, a requirement of the PWA. He explained that putting the employee classification on the payrolls is extremely important. The DOL has debarred companies in the past for failing to do so. Although R.I. had been compliant in a request for documents by the DOL, the records were incomplete in that they did not include all dates worked and the employees were not paid the full prevailing wage.

Frank Romberger, a DOL Field Representative, testified that he conducted a random inspection of the West Windsor project job site. He spoke with two employees of R.I. installing aluminum bleachers. The two employees told Romberger that they were making $11 an hour and $125 a day, respectively, and Romberger knew that such amounts were well below the prevailing wage in Mercer County. Romberg's initial opinion was that the employees were engaged in "ironworking" based on the fact they were installing metal bleacher frames. However, the work was ultimately characterized as carpenter's work because both the carpenters' and the ironworkers' unions claimed such work and the carpenter's prevailing wage was lower. Thus, R.I. had underpaid nine employees, resulting in a total gross loss of $7,004.21.

David Harrington, a DOL Field Representative, testified that he went to the South Mountain project site as a result of a complaint filed by the carpenters' union. Harrington interviewed seven R.I. employees, all of whom said they were making different wages ranging from $12 to $15 an hour. One said he made "the prevailing rate," but did not know what that meant. The workers were installing seating, which, in Harrington's opinion, was carpentry work for prevailing wage purposes.

During a second inspection of the South Mountain project, Harrington found that one R.I. employee had worked for three weeks at the site, but had not yet been paid and did not know what his rate of pay was other than it was the "prevailing rate." Another two employees, when asked by Harrington their rate of pay, replied "the prevailing rate," but did not know the amount. Harrington ultimately concluded that R.I. failed to pay seventeen employees the prevailing wage, resulting in a gross loss of $19,535.21. According to Harrington, R.I. also failed to submit all of its payroll records, as required by the PWA.

The evidence reveals that the terms, conditions and applicability of the CBA and Appendix A caused much confusion. First, the DOL did not receive any information about the Union or its CBA or Appendix A until after the completion of the projects at issue in this case. Second, members of the DOL found the language of the no-layoff benefit provision to be unclear as to whether the benefit had to be given by R.I. or whether it was discretionary.

Scott Suprina, R.I.'s Vice President, testified that at the time of the hearing, negotiations between the company and the Union were still ongoing. However, he also testified that he was "absolutely" bound by the CBA as of February 10, 2005, the date to which he verbally agreed with the Union.

Randy M. Ligator, the Union president, testified that not one of the Union's members had yet become eligible for the no-layoff agreement because the eighteen-month wait period had not expired. Therefore, all of the Union's members were entitled to be paid the prevailing wage and were still subject to being laid off.

At the hearing, the DOL also produced evidence of the April 18, 2004 settlement of the prior PWA violation. The settlement was admitted in evidence without objection.

The ALJ found that R.I. failed to pay its employees the prevailing wage at the Saddle Brook, West Windsor and South Mountain projects. R.I. also failed to properly classify its employees in its certified payrolls on each project and it failed to submit certified payrolls for the West Windsor and South Mountain projects. Accordingly, the ALJ recommended: (1) dismissal of R.I.'s appeal; (2) payment of $27,937.18 in wages, and (3) $30,028.70 in fees and penalties. The ALJ also recommended debarment of R.I. and its three principals.

The ALJ rejected R.I.'s argument that the National Labor Relations Act, 29 U.S.C.A. §§ 151 to 169, preempts the PWA. The ALJ also found the DOL's classification of installation of seating as "carpentry" for the purpose of determining the prevailing wage rate was reasonable based on the earlier settlement. Regarding debarment, the ALJ found that, upon review of the factors set forth in N.J.A.C. 12:60-7.3, R.I.'s violations warranted debarment.

R.I. filed exceptions to the ALJ's initial decision. The DOL Commissioner adopted the findings and recommendations of the ALJ. Thus, R.I. and its principles were debarred and ...

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